Michael Underdown and Secretary, Department of Social Services
[2014] AATA 543
[2014] AATA 543
Division GENERAL ADMINISTRATIVE DIVISION File Number
2014/1141
Re
Michael Underdown
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Mr R G Kenny, Senior Member
Date 7 August 2014 Place Brisbane The Tribunal affirms the decision under review.
...........................[Sgd].......................................
Mr R G Kenny, Senior Member
CATCHWORDS
SOCIAL SECURITY – Pension bonus scheme – Late application for registration – Work test not satisfied in two of five test periods – No basis for extension of time – Decision under review affirmed
LEGISLATION
Acts Interpretation Act 1901 (Cth) s 15AA
Administrative Appeals Tribunal Act 1975 (Cth) s 34J
Social Security Act 1991 (Cth) ss 19AB, 92A, 92B, 92C, 92H, 92N, 92P, 92Q, 92U, 92V
Social Security (Administration) Act 1999 (Cth) ss 21, 22, 23
CASES
Mills v Meeking and Another (1990) 169 CLR 214
Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82
Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115
Platt and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 912
Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634
Scott v Secretary, Department of Social Security [1999] FCA 1774
SECONDARY MATERIALS
Guide to Social Security Law
REASONS FOR DECISION
Mr R G Kenny, Senior Member
7 August 2014
APPLICATION
Under Part 2.2A of the Social Security Act1991 (Cth) (“the Act”), the pension bonus scheme (“the PB scheme”) enables people who stay in remunerative employment after reaching the relevant age for payment of the age pension, but who defer claiming the
age pension, to receive a single-sum pension bonus.[1] Dr Michael Underdown
(“the applicant”) reached the age pension age of 65 on 16 April 2009. He worked
full-time until 15 June 2012 and then part time until 30 June 2013. Having contacted Centrelink about the PB scheme on 8 July 2013, he applied for registration in the
PB scheme and claimed the age pension on 17 July 2013. On 20 August 2013, a Centrelink officer rejected his application for registration in the PB scheme and that decision was affirmed by an authorised review officer on 22 November 2013 and, in turn, by the Social Security Appeals Tribunal (“the SSAT”) on 4 February 2014. The matter is to be determined by the Tribunal in the absence of the parties without a formal hearing.[2]
[1] Section 92A of the Act.
[2] In accordance with s 34J of the Administrative Appeals Tribunal Act 1975 (Cth).
APPLICANT’S SUBMISSION
The applicant provided a written submission dated 6 May 2014 and a supplementary submission received by the Tribunal on 16 May 2014. He submitted that the SSAT decision “errs in law” and is “inequitable”. He alleged that he had not been afforded procedural fairness in the manner in which his reviews of the initial decision have been conducted. In particular, he expressed concern that the SSAT decision concentrated on the lateness of his application to become a member of the PB scheme when, he wrote, this was barely mentioned at the hearing. He was critical of the PB scheme and of the Centrelink practices in not providing information about the PB scheme to the public.
The applicant wrote that he does not accept the manner in which the SSAT calculated the five “test periods” in which he worked, each of which commenced on the date of his birthday. He submitted that the test periods, save for the first one, should be constituted by calendar years from 1 January to 31 December. He set out the following hours of his work from 16 April 2009 until 7 July 2013 with the identified time-frames based on calendar years:
16 April 2009 until 31 December 2009 (1,200 hours)
1 January 2010 until 31 December 2010 (1,920 hours)
1 January 2011 until 31 December 2011(1,920 hours)
1 January 2012 until 15 June 2012 (880 hours)
16 June 2012 until 31 December 2012 (152 hours)
1 January 2013 until 7 July 2013 (55 hours)
The last two entries reflect his part-time employment in those periods.
The applicant submitted that reliance should be placed on s 15AA of the
Acts Interpretation Act 2001(Cth) (“the Interpretation Act”) when interpreting the terms of the Act and that the SSAT had erred in limiting that provision to circumstances where there is an inherent ambiguity in the legislation. He noted the history of the PB scheme and submitted that it was not the intention of Parliament to allow a person to work after reaching age 65, thereby saving the Commonwealth the pension payments that would have been made, and then not to pay the pension bonus. He described the terms of the Act dealing with the PB scheme as being “inherently illogical” especially in requiring a person to register for the PB scheme 13 weeks before turning 65 because, at that time, a person would not know if he/she will be working beyond 65, whether any work will be on the same basis, how long he/she will remain in the workforce and whether he/she will accumulate enough paid hours for one or more bonus years. He submitted that it could not be the intent of the Act “to discriminate between those senior citizens who remain in salaried employment after reaching 65 and those who are paid on a consultancy basis, who are not working a predetermined number of hours”.
CONSIDERATION
I have noted the concerns expressed by the applicant but can find nothing untoward in the published reasons for the decision under review. I agree with the observation of the SSAT concerning the use of s15AA of the Interpretation Act which reads:
15AA Interpretation best achieving Act’s purpose or object
In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.
Mr Warren submitted that the provisions in the Act concerning the PB scheme were clear and unambiguous and that resort to that provision in the Interpretation Act was not required.[3] I accept his submission. Although the PB scheme provisions of the Act have a level of complexity, I am satisfied that they are not ambiguous in the manner that the applicant submitted. The applicant’s criticisms of the PB scheme are not matters about which I make comment, save that the PB scheme is a statutory one and decision makers in Tribunals are required to apply the terms of the legislation as it stands.
[3] Citing Mills v Meeking and Another (1990) 169 CLR 214 per Mason CJ and Toohey J at 223.
The applicant was critical of Centrelink practices in not providing information about the PB scheme to the public. However, Centrelink was under no duty to keep people informed of changes in legislation or their potential social security benefits.[4]
[4] See Scott v Secretary, Department of Social Security [1999] FCA 1774 at [47]-[51] and Murphy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 115 at [17].
Qualifications for the pension bonus include the requirements that the person must be registered as a member of the PB scheme, must not have received the age pension and must have accrued at least one full year bonus period while registered as a member of the PB scheme.[5] In this case, the application for registration in the PB scheme had to be made during the period which began 13 weeks before the date on which the applicant qualified for the age pension and ended 13 weeks after that date.[6] The relevant date for the applicant was 16 April 2009 and the application for registration in the PB scheme was made in July 2013. That this was more than four years after the relevant date is not disputed by the applicant.
[5] See s 92C of the Act.
[6] See s 92H(1)(a) of the Act.
There is provision in the Act for extension of the time in which an application may be made[7] but this is subject to the following qualification:
[7] See s 92H(3) of the Act.
92H Timing of application and registration
…
(4) The Secretary must not make a decision to extend the period within which a person must lodge an application unless, if it were assumed that the person had been a member of the pension bonus scheme throughout the pre‑application period:
(a) the person would have been a non‑accruing member for all of the pre‑application period; or
(b) both:
(i) the person would have been an accruing member for some or all of the pre‑application period; and
(ii) the person would have passed the work test for each test period that is applicable to the person.
…
(5) For the purposes of this section, the pre‑application period is the period
beginning on:
(a) in the case of a person whose date of qualification for the age pension occurs on or after 1 July 1998—the person’s date of qualification for the age pension; or
(b) in the case of a person whose date of qualification for the age pension occurs before 1 July 1998—1 July 1998;
and ending on the date on which the person lodged the application.
(6) For the purposes of this section, to work out what is a test period:
(a) identify the overall accruing period, which is that part of the
pre‑application period for which, if it were assumed that the person had been a member of the pension bonus scheme throughout the
pre‑application period, the person would have been an accruing member of the scheme;
(b) if the overall accruing period is 365 days or less—the overall accruing period is the only test period;
(c) if the overall accruing period is longer than 365 days—each of the following periods is a test period:
(i) the full‑year period beginning at the start of the overall accruing period;
(ii) if 2 or more succeeding full‑year periods are included in the overall accruing period—each of those full‑year periods;
(iii) the remainder (if any) of the overall accruing period
As noted above, the applicant submitted that the test periods, save for the first one, should be constituted by calendar years from 1 January to 31 December and set out his version of them. I do not accept his submission in that regard. For specific parts of the Act, the term “year” is defined to mean “calendar year”.[8] However, for Part 2.2A of
the Act, which deals with the PB scheme, s 92B of the Act provides the following definitions:“full year period” means a continuous period of 365 days.
“part‑year period” means a continuous period of less than 365 days.
[8] See s 19AB of the Act.
Those definitions make it clear that the term “year” in respect of the PB scheme is not to be taken as a calendar year but as a period of 365 days. Further, s 92H(6)(c) of the Act makes it clear that each year constitutes 365 days with the first and subsequent years commencing on the applicant’s birthday.[9] In this case, the applicant’s pre-application period commenced on 16 April 2009 and ended on 17 July 2013. That comprised the following test periods:
16 April 2009 until 15 April 2010
16 April 2010 until 15 April 2011
16 April 2011 until 15 April 2012
16 April 2012 until 15 April 2013 and
16 April 2013 until 8 July 2013.
[9] Platt and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 912 at [15].
Once registered in the PB scheme, a person will either be an accruing member[10] or a non-accruing member.[11] It is not disputed that the applicant was an accruing member in each of the five test periods. In issue is whether or not he satisfied the work test in each of the test periods. The work test for a full year is defined as 960 hours of gainful work[12] which equates with an average of 18.5 hours per week. For a part year period, the work test can be satisfied on a pro-rata basis.[13]
[10] See s 92N of the Act.
[11] See s 92P, 92Q of the Act.
[12] See s 92U of the Act.
[13] See s 92V of the Act.
In his submission the applicant described two periods of part-time work from
16 June 2012 until 31 December 2012 and 1 January 2013 until 7 July 2013 involving, respectively, 152 hours and 55 hours of work. Those work hours are consistent with the terms of a letter from his employer, dated 22 July 2013, which confirmed that the applicant was working full time from 1 May 2007 until 15 June 2012 and that he worked 207.20 hours on a casual consultancy basis from 16 June 2012 until 30 June 2013. His part-time hours of work in the last two test periods equate with an average of 5.4 hours per week and 2 hours per week, respectively. When those average weekly hours are transposed into the test periods set out above, they fall short of the required average of 18.5 hours required to satisfy the work test. It follows that the work test was not satisfied in each of those test periods involving part-time work. Accordingly, there is no basis under the Act for granting the applicant an extension.
The Social Security (Administration) Act1999 (Cth) (“the Administration Act”) sets out the time-frames within which an application for pension bonus must be made.[14] The claim must be made within 13 weeks of a person ceasing to meet the work test although there is provision for this to be extended.[15] While the Administration Act does not do so, guidance in relation to the exercise of the discretion to extend time is provided in the Guide to Social Security Law (“the Guide”) at 3.4.7.80.[16] The Guide is published by the respondent to provide assistance to those who administer the Act and the Administration Act. The Tribunal is not bound to apply policy instructions of the kind referred to in the Guide but may do so and, indeed, will usually apply the guidelines unless there are cogent reasons in a particular case for not doing so. There are no such grounds in this matter. In so far as relevant, the Guide, at 3.4.7.80, reads:
[14] See ss 21-23 of the Administration Act.
[15] See s 23(1) of the Administration Act.
[16] For appropriateness for use of the Guide to assist in the interpretation of the Act, see Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 639-645 and Minister for Immigration, Local Government and Ethnic Affairs v Roberts (1993) 41 FCR 82 at 86.
Reasons to accept late claims
The intention of the late claims provisions is to allow acceptance of late claims from members who have not been able to lodge a claim within the time limits due to special circumstances, and not for members who deliberately claim late in order to get a higher bonus. The member should be asked for their reasons for making a late claim for pension bonus and evidence should be provided, where applicable/appropriate.
Examples may include cases where a member:
·has poor numeracy or literacy skills,
·was ill,
·was located in a remote area,
·performed irregular work that made it difficult for the member to determine the lodgement period,
·was helping a close family member suffering from a serious illness,
·has experienced the death of a close family member,
·had experienced a major disruption to their living arrangements (such as their home being fully or partially destroyed or the member or member's partner moved into a nursing home),
·was unaware that post 20 September 2009 they could no longer be a non-accruing member whilst their younger partner was working and the working partner was affected by the closure of the scheme to new entrants (a time limit of approximately 12 months would apply to these cases).
The list above is not a full list of acceptable reasons to accept a late claim. Each case should be judged on its merits.
Before accepting a late claim, the delegate of the Secretary should consider how late the claim is, and whether this is reasonable when considering the event/s that caused the member to claim late. For example, if a person was ill for 4 months after ceasing work, it would not be reasonable for the claim to be 12 months late (unless there were other special circumstances that contributed to the delay).
That list does not purport to be exhaustive, but the nature of the examples involves circumstances of a person being unable to make or being prevented from making a timely claim. The Guide also requires that the length of the delay be taken into account. That has particular relevance in this matter where the claim was made more than four years out of time. Also, there is no evidence of any event of the kind listed in the Guide or any other event which prevented the applicant from making a timely claim. I am satisfied that there is no basis under the Administration Act for extending the time for lodging his claim for the pension bonus.
DECISION
The decision under review is affirmed.
I certify that the preceding 16 (sixteen) paragraphs are a true copy of the reasons for the decision herein of Mr R G Kenny, Senior Member ............................[Sgd]........................................
Associate
Dated 7 August 2014
Hearing on the papers: 8 July 2014
1
5
0